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The Pakistan Credit Rating Agency Limited
Press Release

Date
31-Dec-19

Analyst
Muhammad Noor Ul Haq
noorulhaq@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Entity Ratings to Getz Pharma (Pvt.) Limited

Rating Type Entity
Current
(31-Dec-19)
Action Initial
Long Term AA-
Short Term A1
Outlook Stable
Rating Watch -

Getz Pharma is the second-largest pharmaceutical company of Pakistan, by market share and sales revenues. The strength of the company is based on the product suite that it markets in the local market and also in the export. The hallmark of the company is the accreditation that it has obtained from World Health Organization (WHO), Geneva as well as it is the first and only company in Pakistan that is certified and accredited by the European based Pharmaceutical Inspection Cooperation Scheme (PIC/s). The company has the research base in Pakistan as well as the production facilities; through which it feeds multiple countries around the globe. Top product concentration is adequate and reflects some of the repeat prescriptions. In terms of turn over, the local market is dominated and the export window is diverse. The export revenue hedges the company’s cost of imports of raw material from adverse impact, rendering it’s gross margins stable than pharma companies which do not have substantial exports. The profitability margins are very strong with the history of dividend payouts. Lately, the financial profile has seen debt being accumulated but when compared to equity and cashflows it remains well managed. The debt has been procured for an expansion project, which the company has been funding hitherto with internally generated equity. The production will start gradually, yet the current operations remain capable of servicing the debt. This project is being envisaged as a giant leap for the company of which success is really crucial. The governance framework may improve in line with the standards for the large corporates.
The ratings are dependent on the continued sustainability of profits and market share. Adequacy of cash flows and the availability of alternative resources to make debt-related payment remains critical. Meanwhile, compliance with internally-defined leveraging metrics is a prerequisite. Sanguine governance practices are essential.

About the Entity
Getz Pharma is a Private Limited pharmaceutical company; the operations of entity have been in Pakistan since 1995. It is a wholly-owned subsidiary of Development Holding Asia Limited (DHAL). The two-member BoD (nominee of DHAL) comprises experienced professionals. Mr. Khalid Mehmood, Chief Executive & Managing Director since the inception Company has over 34 years of experience in the pharmaceutical and health care industry. Before joining Getz Pharm as its CEO, he worked in progressively responsible positions with major pharmaceutical companies in the US, South America, Far East, and Africa, in technical operations and marketing. He is an MBA in Marketing from Rutgers School of Management, Rutgers University, USA also holds BS (Bachelors of Science) in Industrial Engineering from California State University, USA. He has been the president of the World Wide Fund for Nature (WWF) for 6 years. He is supported by an experienced core management team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.